Participants are more accurate at remembering faces of their own- relative to another ethnic group (own-race bias, ORB). Here, we examined event-related potential (ERP) correlates of this effect in an experiment testing recognition memory for Asian and Caucasian faces in Caucasian and Asian participants. Asians had been living in Germany for at least six months (mean = 22 months) and thus had considerable expertise with Caucasian other-race faces. While both Asian and Caucasian participants demonstrated more accurate recognition memory for the respective own-race faces, the size of the own-race bias was significantly larger for Caucasian participants. Test phase ERPs revealed more negative N170 amplitudes for other-race faces in both participant groups, probably reflecting more effortful structural encoding. The subsequent occipito-temporal P2 yielded significantly more positive amplitudes for own-race faces in Caucasian, but not in Asian participants. This is in line with recent results, demonstrating ethnicity effects in P2 in those participants without substantial expertise for other-race faces only. Additionally, the magnitude of the P2 ethnicity effect correlated with the difference in self-reported contact quality towards own- and other-race persons. Finally, in the subsequent 280-400 ms time window (late N250), both groups demonstrated more negative amplitudes for the respective other-race faces at occipito-temporal channels, and this ERP effect of ethnicity was found to significantly correlate with the own-race bias in recognition memory. In sum, these findings suggest an influence of ethnicity on face processing starting at early structural encoding stages in the N170 time range. Individual experience, as indicated by self-reported quality of contact, affects later and more fine-grained stages of perceptual processing reflected in the P2. Crucially, ERP effects in the 280-400 ms time window presumably represent the processing of individual identity of the presented faces, and are thus directly related to the behavioral ORB in recognition memory.